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Wyoming Approvals Continue, but EPA Steps In

As expected, Barrett Resources Corp.'s request for eight water discharge
permits to operate in the Powder River Basin were approved last week by
the Wyoming Department of Environmental Quality. But Barrett and other
producers operating in the prolific coalbed methane basin may be holding
their breath to see if the permit approval process slows down following
an anticipated state public hearing Jan. 3 (see NGI, Nov.
6, Dec. 11).

Following a letter from the U.S. Environmental Protection Agency earlier
this month - triggered by protests from an environmental group that questions
some of the approved permits - the DEQ now has an extra burden to prove
to federal officials that the coalbed methane projects are not degrading
state water. EPA has warned that without an adequate monitoring program,
which may include adding more monitoring requirements by producers, the
state faces the possibility of losing its authority to issue water discharge
permits.

Barrett's newest approved permits, which got the go ahead last Friday,
allow the Denver-based company to begin dewatering 132 wells that have
been drilled to the Wyodak coal, and include 281 undeveloped well sites
that will be incorporated into future drilling plans. Another 12 permits,
which had already gotten tentative approval, cover 214 previously drilled
wells and 294 future drillings. Those dozen permits are on schedule for
approval within 30 days, according to Barrett.

Barrett also needs approvals for another 85 permits covering 336 wells
and 1,260 future locations, but DEQ won't act on them - or any other company's
pending requests-before the public hearing set in Gillette, WY on Jan.
3.

Earlier this month, EPA sent a letter to DEQ and asked the state agency,
which receives its authority to operate from the federal agency, to address
concerns about water quality standards it found in 23 proposed coalbed
methane permits in the Powder River Basin. EPA is concerned about the salt
content of groundwater that methane producers would draw out of coal seams
to release methane. EPA is concerned that the surrounding soil would be
affected if salty groundwater were dumped on the ground.

EPA also wants Wyoming officials to considering adding requirements
within the state's rules that would require additional monitoring and other
protections to ensure that the pollutant levels in the state's water bodies
remain within "acceptable" levels for irrigation and stock watering.
Wyoming has standards requiring certain streams to remain at specific levels
to guarantee their use for agriculture. However, EPA now wants to be notified
by the state if permit holders exceed the state's standards.

Michael Reed, an engineer with EPA's National Pollutant Discharge Elimination
System water programs team for EPA, said the agency is "at least two
steps away" from taking over the state's job of issuing water permits
if Wyoming does not comply with EPA's requests.

EPA stepped in after the Wyoming Outdoor Council objected to 53 pending
coalbed methane permits. The agency reviewed 23 of the permit requests
before sending the warning letter to Wyoming DEQ. While regulatory authority
remains in DEQ's hands, EPA's concerns have to be mollified.

"We haven't had a chance to finalize how we're going to do this,"
said DEQ's Leah Kraft. She said her department had found few problems with
EPA's concerns, but said that EPA has implied that all of the permit holders
should be required to conduct downstream monitoring.

"At this point we don't feel that's completely necessary,"
Kraft said of the monitoring. "However, on a case-by-case basis, if
we feel we need to institute some in-stream monitoring, we will do that,
but we certainly won't do that for everybody. In some cases it's just a
matter of clarifying some things. I think both agencies are working together."
Carolyn Davis, Houston

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